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IBM, iPark announce launch of PangooSky

By Nie Peng (chinadaily.com.cn)
Updated: 2009-07-29 13:12

Yang Weize (L), Party secretary of Wuxi, and Dah-Chuen Chien, chairman and CEO of IBM's Greater China Group, unveil a plaque for PangooSky's launch in Wuxi, July 28, 2009.[chinadaily.com.cn]

International Business Machines Corp (IBM) and the Wuxi National Software Park (iPark) on Tuesday jointly launched PangooSky, an IBM-powered software service innovation incubation platform in Wuxi, Jiangsu province. The platform will mainly target China's small and medium-sized independent software vendors (ISVs).

After a seven-month trial run, the platform was introduced at a ceremony held at iPark's Jiangsu Software Outsourcing Industry Park. The eastern coastal province hopes to build the iPark into a "pioneering park of software outsourcing in China".

Initiated by the local government, investment in the platform totals 27 million yuan ($4 million). Twenty-one enterprises have signed incubation agreements so far, five of which already have incubated projects in operation.

The system, developed in China, has also been put into use in the United States, said Thomas Li, PhD, director of IBM China Research Lab.

"We also want to see another 'first' – which is being the first to make innovation in China benefit the whole world," Li said.

Thomas Li, director of IBM China Research Lab, delivers a speech during the launch ceremony of PangooSky, an IBM-powered software service innovation incubation platform, in Wuxi, July 28, 2009. [chinadaily.com.cn]

IBM named the new platform after the Chinese legend Pangu, slightly changing the spelling. According to the legend, a giant named Pangu separated the yin and the yang from a cosmic egg with a swing of his powerful axe, creating the earth and the sky. Naming the platform after the legend's character reflects IBM's emphasis on innovation, Li remarked.

According to Alvin Chen, manager of IBM Global Services China's Nanjing Branch, IBM has been offering free technical support on the project. He told chinadaily.com.cn that IBM will hold an equity stake in iPark in the future but details are subject to further talks. The most important thing at the present stage is to ensure a successful beginning, he said.

"IBM is actually looking for a path. Without a beginning nothing can be done...It embodies our confidence. We think the project will surely be successful," Chen said.

Planning of the platform started at the end of 2007 and construction was completed in December 2008, making IBM the first providers of a public technology platform for SaaS (software as a service) in China. IBM says Pangoosky can help ISVs transform from software developers to software service providers faster and with lower costs than would otherwise be possible.

Pangoosky was built by the Wuxi Software industry Development Co with support from the local government and IBM China Research Lab's scientists and engineers. The platform is based on advanced technologies such as Internet-based service delivery, SEaaS (software engineering as a service) and cloud computing, according to IBM.

With cloud computing technology, users don't need to have expertise in or control over the "cloud", or the complex technology infrastructure that supports them. They can avoid capital expenditure on hardware, software, and services when they pay a third-party provider for only what they use. Consumption is billed on a utility or subscription basis with little or no upfront costs.

But satisfying diversified needs of ISVs on one platform can be very difficult, Chen admitted. IBM currently provides module and product-based solutions that allow clients to make adjustments.

Yang Weize, Party secretary of Wuxi, said: "The successful application and promotion of the platform not only reflects a change in the role of the government from a supervisor to a service provider, it also will raise the competitiveness of enterprises in the field of international software outsourcing."

As the platform attracts more and more ISVs, it will drive the development of the software industry in the Yangtze River Delta, Yang added.

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Yin Guorong, general manager of Delversoft, a bakery management software provider based in the iPark, said the platform is convenient to use and the technical and marketing services and assistance provided by the platform has significantly lowered operation costs, helping his business grow fast.

"All you need is to bring your people here," he told chinadaily.com.cn. Facilities such as the office and computers are provided for free, Yin said, adding that he doesn't have to worry about water and electricity bills, and his business enjoys preferential tax policies.

Yin's company does have to turn in a portion of its profits to the park, but if the company makes no profit or suffers a loss, which he said has not been the case, it doesn't pay anything.

iPark

Wuxi is located in the heart of the Yangtze River Delta and the iPark is 90 km west of the metropolis of Shanghai. Construction of the iPark started in 1998 and it was designated one of the country's software industry bases under the National Torch Plan by the Ministry of Science in September 2004.

The iPark occupies an area of 1 sq km, and has a floor area of 400,000 sq m, compared with a planned floor area of 1 million sq m. The iPark now comprises two parks: the Wuxi New District Innovation & Animation Park and the Jiangsu Software Outsourcing Industry Park, and is home to 582 enterprises, including 119 certified software companies at the provincial level.

The park's software output grew by more than 80 percent for four straight years to reach 21.2 billion yuan in 2008, according to the iPark. It has set a target of topping 40 billion yuan this year, according to a statement posted in March on Jiangsu's information industry department's website.